Income tax or not, we can never fully avoid the tax bite

David Gura Sep 18, 2012

Income tax or not, we can never fully avoid the tax bite

David Gura Sep 18, 2012

Kai Ryssdal: Any guesses as to the Marketplace number of the day today?

Yep — 47. The percentage of Americans paying no income taxes that Mitt Romney was caught talking about on tape. The news that broke last night has brought the tax code — in all its local, state and federal complexities — back into focus. Because federal or not, virtually all Americans pay plenty taxes every single day.

From Washington, Marketplace’s David Gura gets us going.

David Gura: Most of us pay taxes as soon as we wake up.

Jeremy Hobson: From APM, in New York, I’m Jeremy Hobson, and this is the Marketplace Morning Report.

Thomas Cooke teaches accounting at Georgetown.

Thomas Cooke: You go to brush your teeth and use the soap. Well, all that stuff was taxed. Then, I’m driving into work and I need to get gasoline. Oh boy, that’s a heavy state tax.

Taxes are a part of my morning routine. My newspaper is taxed, and on the way to work, I go to K Street Café and Bagel.

Gura: Can I get a small coffee, please?

Cashier: Sure.

That’s on the menu for $1.65.  But with D.C.’s 10 percent sales tax…

Cashier: That is $1.81.

Cooke: There is very few people out there you can flat-out say are not paying any taxes.

Thomas Cooke rattles off a list of taxes:

Cooke: There’s a federal gift tax. There’s a federal estate tax. There is a real estate tax we pay annually on our property. 

And it goes on. Taxes follow me all the way to work.

Andrew Parsons: Hey, David. Good morning.

Gura: How’s it going, Andrew?

Where I’m hit with a big tax as soon as I clock in. Tax attorney Clint Stretch reminds me that, along with the payroll tax, there are state and federal withholdings.   

Clint Stretch: The Social Security tax that everybody pays if they work is quite substantial.

Thomas Cooke, at Georgetown, points out the federal tax rate isn’t as high as it used to be.

Cooke: But when you start adding in all these other taxes, it’s clear that there is a large number of people that are paying in excess of 50 percent of their income in taxes in some way, shape or form.

And Cooke says the government is always looking for new ways to make money, for new stuff to tax, especially when budgets are tight.

In Washington, I’m David Gura for Marketplace.

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